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Committee yet to resolve RIL’s gas pricing controversy

Committee yet to resolve RIL’s gas pricing controversy
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First Published: Fri, Jul 06 2007. 11 59 PM IST
Updated: Fri, Jul 06 2007. 11 59 PM IST
The committee of secretaries (CoS) formed by the government to resolve the controversy surrounding the pricing of gas from Mukesh Ambani-owned Reliance Industries Ltd’s (RIL) D6 block in the Krishna-Godavari basin failed to reach a conclusion at a meeting held on Friday.
“CoS is still going through presentations. NTPC made one today (Friday),” said a power ministry official present at the meeting. The next meeting is scheduled for Tuesday.
RIL’s gas could cost around $4.33 (Rs173.2) per million British thermal unit at Kakinada. This price excludes marketing margins and transportation costs. RIL had submitted its formula for pricing to the petroleum ministry, which is in favour of approving this, but the pricing methodology is being questioned by the power and fertilizer ministries (power and fertilizer plants are major users of gas.) The Andhra Pradesh government and Anil Ambani’sReliance Natural Resources Ltd have also joined hands to oppose RIL’s pricing. The fertilizer and power ministries and the state government want the gas at lower rates.
The Ambani brothers are in a high-stakes battle over supplies from RIL’s gas block. Acting on a complaint by Reliance Natural Resources over previous contractual obligations, the Bombay high court recently restricted RIL from selling KG gas to anyone other than RNRL and NTPC Ltd.
A fertilizer ministry official said they were yet to present their case to CoS.
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First Published: Fri, Jul 06 2007. 11 59 PM IST